On the flip side, a decline in the global demand for beef leads to lower cattle prices. The global beef demand: When beef demand increases, live cattle prices rise as well.Some of the factors that move the live cattle market include: Source: Equity Clock What moves the Live Cattle - What affects the Live Cattle the most? The live cattle market tends to perform better during the second half of the year than during the first half of the year, as you can see in the chart below: Seasonality refers to the tendency of the price of an asset to move in a particular way during a certain period of the year, which can be months or seasons, such as spring and summer. What is the seasonality of Live Cattle futures? Live Cattle futures strategy backtestĪ backtest with strict trading rules, settings, statistics, and historical performance is coming soon. In addition to your analysis for entry and exit signals, you need to have some risk management and trade management techniques. Fundamental analysis would mean following USDA reports and considering macroeconomic factors. With technical analysis, you should be able to look at a live cattle futures chart and determine the best entry point to purchase a contract, you don’t want to buy too high and risk a loss. Your live cattle futures strategy should include technical and fundamental analyses required to find entry and exit signals. What is a Live Cattle futures strategy?Ī live cattle futures strategy refers to the methodologies and techniques you can use to profitably trade the live cattle futures market. However, with the right strategy, you can trade live cattle futures to diversify your portfolio into the livestock commodity market or even to speculate and profit from price movements. Live Cattle futures contracts are most often traded by industry stakeholders (cattle farmers and meat processors) who use it to hedge their risk exposure in the cattle market, rather than by speculators who just want to trade price fluctuations. The contract trades on the CME Globex platform, and it is settled by physical delivery. Live cattle are cattle that have grown to the requisite weight for slaughter, which is usually about 1200 to 1400 pounds.Ī live cattle futures contract is, therefore, a legally binding agreement to receive or deliver a specified quantity of full-grown cattle, weighing between 1,200-1,400 pounds, on a future date at a pre-agreed price.
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